Uncovered Options Trading System

Options Autotrading
101 trades were issued in 2017-20
only 4 red

Margin Returns


Uncovered options trading is limited by certain margin requirements. As a result, there are two ways of representing trading system's returns. The returns can be tied to the premium received for selling options short or returns can be tied to a hypothetical margin account that is used to sell options short.

Each way of calculating returns has its pros and cons. The first one (tied to the premium) is very simple, straightforward and represents an exact return in relation to a premium. The limitation of the first method is that it does not take into account margin requirements and does not represent "$" value. Furthermore, in some cases it can be difficult to evaluate "$" returns.

The second method (tied to a margin account) allows one to better see possible "$" returns. However, the returns are approximate. As a rule, margin requirements vary from broker to broker. Usually they are similar. However, different brokers use different margin formulas, use different coefficient in those formulas and, in addition, some brokers may have additional margin rules.

The return results represented on our web site are based on the premium received for selling the options short and do not reflect margin. It is recommended that you contact your broker about margin requirements on uncovered options trading before using any information on this web site. As an example of margin return, we have "Trade Calculator" which allows one to recalculate past performance in relation to the margin requirements. This calculators uses a margin formula and gives an approximate margin portfolio growth (bear in mind your broker may use a different margin formula).

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DISCLAIMER: THIS INFORMATION IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE ANY FINANCIAL ADVICE. RISK IS INVOLVED IN ALL STYLES OF MONEY MANAGEMENT. Uncovered options trading involves greater risk than stock trading. You absolutely must make your own decisions before acting on any information obtained from this Website.

The return results represented on the web site are based on the premium received for the selling options short and do not reflect margin. It is recommended to contact your broker about margin requirements on uncovered options trading before using any information on this web site. Use our "Trade Calculator" to recalculate our past performance in relation to the margin requirements, brokerage commissions and other trading related expenses. Past performance is not indicative of future results.

Risk Statement:

Naked options trading is very risky - many people lose money trading them. It is recommended contacting your broker or investment professional to find out about trading risk and margin requirements before getting involved into trading uncovered options.

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